Value Analysis 2.0: No One Size Fits all Hospitals
By Robert T. Yokl, Chief Value Strategist
I just read an article in HPN magazine recommending one singular approach to what I call Value Analysis 2.0 (beyond price and standardization) that the author suggested would fit all size hospitals. I beg to differ with the author on this point, but let me tell you first what I liked about the article.
I was happy to see the author agrees with me that big price and standardization savings are now dead, and that hospitals now need to focus on savings beyond price (i.e. utilization) to keep their savings machine humming. I also agree that a fresh approach to value analysis in now called for if healthcare organizations want to move to the next level of savings performance. And that any and all supplies and purchase services should be included in the scope of value analysis teams’ charters so that no supply related cost is exempt from value justification.
I couldn’t agree more with the author that without a total and unwavering commitment from the c-suite no real change can or will happen beyond what you are doing now. And that material management should be the data guru’s for your value analysis teams, thus pointing the way to new savings opportunities, so your value teams aren’t burdened with this complex, time consuming and arduous task.
Where I differ with the author are on two points. First, that all hospitals should be establishing product-line value analysis teams and secondly that value team members shouldn’t need to do any of the teamwork because they are too busy.
On the first point, it’s my strong opinion, that small hospitals, which represent 80% of all hospitals in the country, don’t need elaborate product-line value analysis teams because they don’t buy enough products, services and technologies to warrant the time investment to do so. Second, no one should ever be too busy to save money or not ready to roll up their sleeves to find it. Just listening to presentations from material management, then making decisions as a committee isn’t value analysis at all. This is Value Analysis 1.0, which we are trying to move beyond.
In the final analysis, I thought the author did a great job of explaining what she saw as the future of value analysis in healthcare. Nevertheless, I think we all need to remember that “one size” of anything doesn’t fit all situations. We need to customize what we are trying to accomplished based on the size, culture and complexity of our healthcare organization. Then we will get the exact fit for our healthcare organization.
P.S. If you would like more powerful savings ideas like this one I would recommend that you sign-up for our “no cost” weekly Savings Beyond Price™ e-Newsletter at www.Strategicva.com. You will also get a copy of my e-book “Your Target Blueprint for Supply Chain Management Success”, as a bonus.
